October 24, 2005

Mail Fraud Sprawl

This is the third in a series of posts in which I use the George Ryan trial to illustrate the unfairness of federal mail fraud and RICO prosecutions.

American courts ordinarily exclude “other acts” evidence. Although a defendant accused of purse-snatching may have been convicted a dozen times of purse-snatching, the jury will not learn of his prior convictions. This “character” or “propensity” evidence will be excluded on the theory that jurors should not be tempted to convict the defendant just because he appears to be a sleazy guy. They should focus only on the government’s accusation of a particular wrongful act at a particular time. The trial of George Ryan and Larry Warner will depart from this vision of justice. It will move toward the example set by Soviet trials for “hooliganism.” Ryan and Warner may be tried, in effect, for the federal crime of wheeling and dealing while sleazy (and, in Warner’s case, while rich and, in Ryan’s, while political).

The Ryan-Warner indictment alleges nine counts of mail fraud – all of them mailings in furtherance of one fraudulent scheme. Under the statute, mailings can be innocuous, and prosecutors usually can multiply the number of “counts” (or crimes) indefinitely.

The indictment alleges that the fraudulent scheme continued from the time George Ryan was elected Secretary of State until he left the Governor’s office twelve years later. It then offers 128 numbered paragraphs (about 40 pages’ worth) that begin with the words “it was a part of the scheme” or “it was a further part of the scheme.”

All of these paragraphs allege conduct by Warner, Ryan or both that, if proven, is unlikely to endear them to jurors. Warner allegedly threatened contractors with a loss of state business unless they hired him as a lobbyist. Ryan allegedly shared non-public information with Warner, encouraged a reluctant employee of the Illinois Secretary of State’s office to return Warner’s phone calls, and made decisions that benefited Warner’s clients. After hearing complaints about Warner’s conduct and promising to investigate, Ryan allegedly continued to include Warner in government decision-making. Ryan allegedly accepted free vacations from people who rented property to the state. Ryan allegedly took consulting fees from Senator Phil Gramm’s presidential campaign and concealed them. Ryan allegedly allowed Warner to arrange low-number license plate for friends, including some who had contributed to Ryan’s electoral campaign. The indictment contains a lot more. Many of its allegations do not appear to describe criminal conduct, but all of them sound sinister.

To anyone who uses the word “scheme” in the ordinary way, the allegations spread over 40 pages of the Ryan indictment do not appear to constitute a unitary scheme or plot. Nevertheless, when defense lawyers objected to the “multiplicity” or “duplicity” of the mail fraud charge (note that “duplicity” is a word with two meanings), the trial judge ruled that the indictment appropriately alleged one scheme.

Breaking the fraudulent scheme alleged in the indictment into smaller components would have required the jury to reach a verdict on each charge rather than lump them all together in one amorphous mass. It also would have allowed the court to sever some charges from others rather than try them all at the same time. Severance would have been appropriate if the judge concluded that there were too many financial transactions for jurors to keep straight (as there surely are in the Ryan case). Severance also would have been appropriate if the judge concluded that the prosecutors’ piling-on of charges would prejudice the defendants (as it surely will). Indeed, the judge probably would have discovered that, under the applicable federal rules, many of the charges could not be lawfully joined in a two-defendant trial. The “severance” option disappears, however, when all of the charges are treated as parts of one big, long-lasting fraudulent scheme.

One can understand why prosecutors cherish wide-ranging trials with endless charges the jury will never be required to resolve, but it is difficult to understand why judges strain to allow them. One doubts that these judges enjoy four-month trials, and limiting prosecutors to a reasonable number of accusations would benefit taxpayers at the same time it afforded fairer trials to defendants.

When judges permit “kitchen sink” trials, prosecutors may increase the pressure on defendants in other cases to plead guilty. The system cannot give everyone a four-month trial. Other authorities – the Justice Department, Congress, and the U.S. Sentencing Commission – may approve harsher penalties whose main, albeit unavowed, function will be to give the prosecutors greater leverage. To accommodate “mail-fraud sprawl” in cases like George Ryan’s, ninety-seven percent of the defendants convicted in the federal courts will wind up with no trials at all.

When judges allow lengthy “one scheme” trials, they often voice confidence that the jury will be able to sort everything out in the end. It would, however, take a special verdict form stretching from the courthouse in Chicago to the Governor’s Mansion in Springfield to sort the issues in the Ryan trial. With respect to each of the acts alleged to be “parts of the scheme,” this form might require the jurors to determine (a) whether the act occurred; (b) whether Ryan and/or Warner participated in it; (c) whether the defendant or defendants who did participate did so with fraudulent intent; (d) whether the act violated any of the state law duties set forth in the indictment and, if it did, which ones; (e) whether this act deprived anyone of money, property, or the intangible right to honest services and, if it did, which ones; and (f) whether the means of depriving the victim of money, property, or the intangible right to honest services included a false statement, a false promise, or a material omission and, if so, which one. Of course no jury will be required to complete a verdict form like this, and of course no jury would be likely to go through such a picky analysis of every factual allegation. At the end of a long trial, however, the jury may have heard enough bad things about George Ryan and Larry Warner to want to convict them of devising a scheme or artifice to defraud, whatever that language might mean. The rule of law probably won’t have much to do with the trial’s outcome.

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It's always a treat to read your take on the federal crimnal stuff. Have you read the 7th Cir. model jury instruction for mail fraud? It won't make you any happier -- "In considering whether the government has proven a scheme. . . it is essential that one or more of the [false pretenses, representations, promises and] acts charged in the portion of the indictment describing the scheme be proved establishing the existence of the scheme beyond a reasonable doubt. However, the government is not required prove all of them."

I have not read the Ryan indictment and couldn't comment on it anyway, but I think you may overstate things with these kitchen sink and throwing-dirt-at-the-wall metaphors. The prosecutors undoubtedly very carefully picked things (apparently many things) they had lots of evidence for to include in the indictment. As a practical matter, if they didn't, any good defense attorney would walk the jury through paragraph after paragraph of the indictment in closing argument, pointing out all the stuff that wasn't proven. It's a very effective technique, one to be avoided if possible in crafting an indictment.

Clever idea about a federal statute covering local bribery, based on the "republican form of government" clause. The closest thing we have to it is 18 USC 666, which (among other things) prohibits bribery concerning programs receiving federal funds. You would be astounded at the number of state and local programs that receive federal funds though.